Billionaire Patrice Motsepe's ARM expects decline in FY23 results

African Rainbow Minerals (ARM), the South African mining company controlled by billionaire Patrice Motsepe, has projected a decline in its headline earnings for the 2023 fiscal year.

ARM noted in a press release that it expects a decrease in headline earnings for the 2022 financial year, ranging between 18 and 27 percent, compared to the corresponding fiscal period culminating on June 30, 2022 (2022 financial year).

ARM expects to report 2023 financial year headline earnings of between R8.2 billion ($441 million) and R9.2 billion ($495 million) compared to R11.3 billion ($606 million) in the 2022 financial year.

Concurrently, basic earnings for the 2023 financial year are predicted to exhibit a downturn ranging between 33 and 42 percent, totaling between R7.2 billion ($386 million) and R8.3 billion ($445 million) as opposed to the 2022 financial year’s R12.4 billion ($665 million).

The company elaborated that the reduction in 2023 financial year headline earnings primarily stems from diminished commodity valuations, a decrease in production, and sales volumes primarily attributable to logistical impediments, consequently leading to escalated unit costs surpassing the already heightened cost inflation.

ARM underscored that the unfavorable impact on earnings was somewhat alleviated by the relative depreciation of the South African rand in comparison to the U.S. dollar exchange rate.

ARM mines and beneficiates iron ore, manganese ore, chrome ore, platinum group metals (PGMs), nickel, and coal and also has a strategic investment in gold through Harmony Gold Mining.

Motsepe, the company’s founder, owns a 39.7-percent stake in ARM, presently worth $886 million.